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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission File Number: 001-40356

 

Rain Therapeutics Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

82-1130967

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

8000 Jarvis Avenue, Suite 204

Newark, CA

94560

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (510) 953-5559

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

RAIN

 

The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

  

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

  

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     Yes      No  

As of November 3, 2021, the registrant had 26,466,746 shares of common stock, $0.001 par value per share, outstanding, comprised of 18,739,276 shares of common stock, $0.001 par value per share and 7,727,470 shares of non-voting common stock, $0.001 par value per share.

 

 


Table of Contents

 

 

 

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

1

 

Condensed Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020

1

 

Condensed Statements of Operations and Comprehensive Loss (Unaudited) for the three and nine months ended September 30, 2021 and 2020

2

 

Condensed Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit) (Unaudited) for the three and nine months ended September 30, 2021 and 2020

3

 

Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2021 and 2020

4

 

Notes to Unaudited Condensed Financial Statements (Unaudited)

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

29

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

30

Item 3.

Defaults Upon Senior Securities

30

Item 4.

Mine Safety Disclosures

30

Item 5.

Other Information

30

Item 6.

Exhibits

31

Signatures

32

 

i


Table of Contents

 

 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Rain Therapeutics Inc.

Condensed Balance Sheets

(In thousands)

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020(1)

 

 

 

(unaudited)

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,258

 

 

$

58,863

 

Short-term investments

 

 

136,823

 

 

 

 

Prepaid and other current assets

 

 

7,325

 

 

 

662

 

Total current assets

 

 

157,406

 

 

 

59,525

 

Property and equipment, net

 

 

178

 

 

 

99

 

Operating lease right-of-use asset

 

 

416

 

 

 

447

 

Deferred offering costs

 

 

 

 

 

385

 

Other assets

 

 

531

 

 

 

624

 

Total assets

 

$

158,531

 

 

$

61,080

 

Liabilities, convertible preferred stock, and stockholders' equity (deficit)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,678

 

 

$

816

 

Accrued research and development

 

 

5,362

 

 

 

1,527

 

Other accrued liabilities

 

 

1,706

 

 

 

935

 

Operating lease liability, current portion

 

 

158

 

 

 

141

 

Total current liabilities

 

 

10,904

 

 

 

3,419

 

Operating lease liability, net of current portion

 

 

284

 

 

 

312

 

Other long-term liabilities

 

 

68

 

 

 

69

 

Total liabilities

 

 

11,256

 

 

 

3,800

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Series A convertible preferred stock, $0.001 par value; no shares

     and 3,731,208 shares authorized, issued and outstanding as

     of September 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

20,147

 

Series B convertible preferred stock, $0.001 par value; no shares

     and 12,542,198 shares authorized, issued and outstanding as

     of September 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

74,550

 

Total convertible preferred stock

 

 

 

 

 

94,697

 

Stockholders' equity (deficit):

 

 

 

 

 

 

 

 

Common Stock, $0.001 par value; 250,000,000 and 24,000,000

     shares authorized as of September 30, 2021 and December

     31, 2020, respectively; 26,466,746 shares (comprised of

     18,739,276 shares of common stock and 7,727,470

     shares of non-voting common stock) and 3,530,975 shares

     issued and outstanding as of September 30, 2021 and

     December 31, 2020, respectively

 

 

27

 

 

 

4

 

Additional paid-in capital

 

 

219,222

 

 

 

1,149

 

Accumulated other comprehensive income

 

 

5

 

 

 

 

Accumulated deficit

 

 

(71,979

)

 

 

(38,570

)

Total stockholders' equity (deficit)

 

 

147,275

 

 

 

(37,417

)

Total liabilities, convertible preferred stock, and stockholders' equity (deficit)

 

$

158,531

 

 

$

61,080

 

 

(1)

The balance sheet at December 31, 2020 has been derived from the audited financial statements included in Rain Therapeutics Inc.’s final prospectus for its initial public offering filed on April 23, 2021.

See accompanying notes to financial statements.

1


Table of Contents

 

Rain Therapeutics Inc.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

15,284

 

 

$

7,893

 

 

$

26,101

 

 

$

11,195

 

General and administrative

 

 

3,154

 

 

 

591

 

 

 

7,334

 

 

 

2,311

 

Total operating expenses

 

 

18,438

 

 

 

8,484

 

 

 

33,435

 

 

 

13,506

 

Loss from operations

 

 

(18,438

)

 

 

(8,484

)

 

 

(33,435

)

 

 

(13,506

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

11

 

 

 

 

 

 

25

 

 

 

23

 

Interest expense, related party

 

 

 

 

 

(71

)

 

 

 

 

 

(135

)

Change in fair value of convertible promissory notes, related party

 

 

 

 

 

(1,891

)

 

 

 

 

 

(2,024

)

Other income

 

 

1

 

 

 

 

 

 

1

 

 

 

2

 

Total other income (expense), net

 

 

12

 

 

 

(1,962

)

 

 

26

 

 

 

(2,134

)

Net loss

 

$

(18,426

)

 

$

(10,446

)

 

$

(33,409

)

 

$

(15,640

)

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on investments

 

$

5

 

 

 

 

 

$

5

 

 

 

 

Comprehensive loss

 

$

(18,421

)

 

$

(10,446

)

 

$

(33,404

)

 

$

(15,640

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.70

)

 

$

(3.05

)

 

$

(1.96

)

 

$

(4.73

)

Weighted-average shares used to compute net loss per share, basic and diluted

 

 

26,466,746

 

 

 

3,422,458

 

 

 

17,025,032

 

 

 

3,307,932

 

 

See accompanying notes to financial statements.

2


Table of Contents

 

Rain Therapeutics Inc.

Condensed Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share amounts)

(unaudited)

 

 

 

Series A

 

 

Series B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Accumulated Other Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Equity (Deficit)

 

Balance as of December 31, 2020

 

 

3,731,208

 

 

$

20,147

 

 

 

12,542,198

 

 

$

74,550

 

 

 

 

3,530,975

 

 

$

4

 

 

$

1,149

 

 

$

(38,570

)

 

$

 

 

$

(37,417

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

165

 

 

 

 

 

 

 

 

$

165

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,800

)

 

 

 

 

$

(6,800

)

Balance as of March 31, 2021

 

 

3,731,208

 

 

$

20,147

 

 

 

12,542,198

 

 

$

74,550

 

 

 

 

3,530,975

 

 

$

4

 

 

$

1,314

 

 

$

(45,370

)

 

$

 

 

$

(44,052

)

Conversion of convertible preferred stock to common stock

 

 

(3,731,208

)

 

 

(20,147

)

 

 

(12,542,198

)

 

 

(74,550

)

 

 

 

15,069,330

 

 

 

15

 

 

 

94,682

 

 

 

 

 

 

 

 

 

94,697

 

Issuance of common stock upon IPO, net of issuance cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,845,011

 

 

 

8

 

 

 

121,486

 

 

 

 

 

 

 

 

$

121,494

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,430

 

 

 

 

 

 

85

 

 

 

 

 

 

 

 

$

85

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

793

 

 

 

 

 

 

 

 

$

793

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,183

)

 

 

 

 

$

(8,183

)

Balance as of June 30, 2021

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

26,466,746

 

 

$

27

 

 

$

218,360

 

 

$

(53,553

)

 

$

 

 

$

164,834

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

862

 

 

 

 

 

 

 

 

$

862

 

Unrealized gain on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

$

5

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,426

)

 

 

 

 

$

(18,426

)

Balance as of September 30, 2021

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

26,466,746

 

 

$

27

 

 

$

219,222

 

 

$

(71,979

)

 

$

5

 

 

$

147,275

 

 

 

 

Series A

 

 

Series B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible Preferred

Stock

 

 

Convertible Preferred

Stock

 

 

 

Common Stock

 

 

Additional

Paid-in

 

 

Accumulated

 

 

Accumulated Other Comprehensive

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Deficit

 

Balance as of December 31, 2019

 

 

3,731,208

 

 

$

20,147

 

 

 

 

 

$

 

 

 

 

2,986,385

 

 

$

3

 

 

$

236

 

 

$

(17,487

)

 

$

 

 

$

(17,248

)

Vesting of restricted shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

289,377

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

199

 

 

 

 

 

 

 

 

 

199

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,569

)

 

 

 

 

 

(2,569

)

Balance as of March 31, 2020

 

 

3,731,208

 

 

$

20,147

 

 

 

 

 

$

 

 

 

 

3,275,762

 

 

$

4

 

 

$

435

 

 

$

(20,056

)

 

$

 

 

$

(19,617

)

Vesting of restricted shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

135,048

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

196

 

 

 

 

 

 

 

 

 

196

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,624

)

 

 

 

 

 

(2,624

)

Balance as of June 30, 2020

 

 

3,731,208

 

 

$

20,147

 

 

 

 

 

$

 

 

 

 

3,410,810

 

 

$

4

 

 

$

631

 

 

$

(22,680

)

 

$

 

 

$

(22,045

)

Issuance of Series B convertible preferred stock, net of issuance costs of $320

 

 

 

 

 

 

 

 

10,636,510

 

 

 

63,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of convertible promissory notes into Series B convertible preferred stock